Taxes and data tampering

03 Mar 2025 2 min read

Daily update

The idea of a coalition of the willing pushing for a one-month ceasefire in the Russia-Ukraine war is probably neutral, economically. Things like defense spending or energy supplies are unlikely to be affected significantly by this move.
If US President Trump鈥檚 threats were believed, they are proposing the largest increase in US taxes for decades. Markets do not believe the threats. Taxing lumber imports is the latest idea. Taxes on imports from Canada and Mexico supposedly start tomorrow, although across the trade war battlefield the faint sound of a retreat can be heard鈥擟ommerce Secretary Lutnick has suggested the tax rates were not certain. An avocado or a propane tax would be visible, and undermine consumer confidence.
Lutnick also suggested that government spending could be removed from GDP. GDP has many flaws鈥攊t tends to underestimate growth in real time, and fails to capture living standards in an impact economy. However, removing government spending does not make sense鈥擫utnick may not completely understand how GDP is calculated. Tampering with economic data undermines confidence, affecting US asset reserve status.
UK January credit data is a reliable statistic, but not likely to be exciting. US ISM business sentiment data is due and at risk of partisan bias, but is likely to excite attention.